Small-cap stocks could see a significant boost under President-elect Donald Trump’s presidency, potentially doubling their value over the next two years, according to Tom Lee, head of research at Fundstrat.
What Happened: During an interview with CNBC on Friday, Wall Street strategist Lee expressed optimism for small-cap stocks, attributing this to Trump’s re-election.
The election results have already caused a surge in stocks as traders anticipate a new economic agenda, relaxed regulations, and tax cuts.
Lee believes there’s still significant potential for growth. He noted that the index is currently trading at around 10 times forward median earnings, a lower valuation than the S&P 500, which is trading at approximately 17 times forward earnings.
See Also: Jim Cramer Calls Trump’s Return To White House A ‘Huge Win For The Stock Market’
“I do think there’s still a lot of upside,” Lee stated, adding, “So I think small-caps could, over the next couple of years, outperform by more than 100%.”
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